Consider the Borrowing Rates for Parties a and B Construct a Mutually Beneficial INTEREST ONLY Swap That Makes Money

Essay

Consider the borrowing rates for Parties A and B.A wants to finance a $100,000,000 project at a FIXED rate.B wants to finance a $100,000,000 project at a FLOATING rate.Both firms want the same maturity,in 5 years.
$$\begin{array} { | c | c | l | } \hline \text { Firm } & \text { Fixed Rate } & \text { Floating } \\\hline \mathrm { A } & \$ 10.3 \% & \text { Prime } + 1 \% \\\hline \mathrm { B } & \$ 8.9 \% & \text { Prime } + 1 / 2 \% \\\hline\end{array}$$ Construct a mutually beneficial INTEREST ONLY swap that makes money for A,B,and the swap bank IN EQUAL MEASURE.